Premier League Clubs Finally Getting Smarter Through Innovation

People have been writing about the modern association of soccer with business for many years now. Soccernomics, that beautiful book that marries football passion with economic realities, helpfully points out that the problem with this association is that clubs aren’t often treated with the same rules as a free-market business. They hardly ever close their doors due to bad management, and even if they do, they’re allowed to start over with relatively few penalties. However one area where soccer firms are trying to copy their business counterparts is the area of competitive advantage.

In its simplest and most understandable form, Danish Economist Birger Wernerfelt’s view of competitive advantage is defined by the Resource Based View of a firm. According to Wernerfelt, the only way a company can consistently outperform its rivals is through use of a resource that is valuable, rare and that requires extensive tradeoffs to imitate. If a firm coordinates its activities to take advantage of such a resource, it can stay ahead of the competition for quite a while.

A somewhat (though far from perfect) footballing reference point to this business jargon is the ‘firm’ of Barcelona. La Masia is an extraordinarily valuable footballing resource akin to a specialized training program at any Fortune 500 company. They produce recruits that basically only know how to play one way, a style that doesn’t change from the academy to the reserve team and through to the first XI. That’s the reason why Barcelona only buys one or two necessary players each transfer window, and usually young ones. High priced imports such as Zlatan Ibrahimovic, Alex Song and even David Villa to an extent, look like fish out of water a lot of the time. Cesc Fabregas received an education at La Masia and he’s still finding it hard to reintegrate himself after being away for only a few years. Xavi and Andres Iniesta call themselves “sons of the system”. This resource ensures that Barcelona teams always have a conveyer belt of talent that has an advantage over most other sides because their players are 100% comfortable with employed tactics and personnel. Players such as Christian Tello or Isaac Cuenca would not be considered that great in other teams, but they always look lethal when playing for Barcelona because the runs and movements they make are consistent with what they’ve been doing from childhood.

Could Real Madrid set up an academy and do the same thing? Perhaps, but the costs necessary would mean that they perhaps couldn’t buy the best players of the world today, (especially if the club’s finances continue to feel pressure), ensuring Barcelona dominance for some time.

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4 Comments

  1. Sammy October 7, 2012
  2. Eric October 7, 2012
  3. Robbie October 7, 2012
    • IanCransonsKnees October 7, 2012

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